Home owners struggling with 1/2% intererst rates

movilogo

I find it quite confusing.

How can home owners struggle with 0.5% interest?

If they took a tracker mortgage they should be singing merrily at this time.

If they took non-tracker mortgage, their mortgage mostly stayed the same (they'd struggle only if lost job etc.)

If they have re-mortgaged, they are likely to get a reasonable deal now.

So why they are all struggling of a sudden?

chucky

movilogo wrote: »

I find it quite confusing.

How can home owners struggle with 0.5% interest?

If they took a tracker mortgage they should be singing merrily at this time.

If they took non-tracker mortgage, their mortgage mostly stayed the same (they'd struggle only if lost job etc.)

If they have re-mortgaged, they are likely to get a reasonable deal now.

So why they are all struggling of a sudden?

it's a rubbish story with no mention of a 0.5% interest rise and no mention of how many home owners being would be affected by an interest rate rise.

the usual suspects like this story as they live in hope that interest rates will go up if they do and even if interest rates do go up the banks still have to increase mortgage rates which is not guaranteed anyway.

IveSeenTheLight

Graham_Devon wrote: »

Why would wages fall if house prices fell?

Lets say prices fall 30% in the next 2 years....what are the reasons for wages falling?

Less purchasing power after prices fall? First time I've seen that one mentioned.

Quite simply through natural attrition, employers would feel less pressure to offer inrcreasing wages to support positions where the life costs were less.

I'm not saying they would be directly correlated, but it would filter through.

To try and explain a different way. If house prices were still as they were in the 70's, do you think wages would be as they are now?

P.S. My less purchasing power is relating to the amount of net income left after housing costs removed.
At the moment housing costs are circa 29% of income

29% of £1000 is £290, meaning that £710 is left for other purposes

29% of £500 is £170 meaning £330 left for other purposes.

Lower housing costs and lower wages, means less disposable income.
Everything else would need to reduce to make affordability the same

LydiaJ

movilogo wrote: »

I find it quite confusing.

How can home owners struggle with 0.5% interest?

If they took a tracker mortgage they should be singing merrily at this time.

If they took non-tracker mortgage, their mortgage mostly stayed the same (they'd struggle only if lost job etc.)

If they have re-mortgaged, they are likely to get a reasonable deal now.

So why they are all struggling of a sudden?

Nobody is suggesting that mortgagees are struggling because of 0.5% rates. What people are suggesting is that if households are struggling despite 0.5% rates, then things will get a lot worse when rates eventually go up. Other posters think that this will not be significant. Hence the debate.

The reasons why households are struggling will vary - redundancy, wage cuts, hours cut, illness, divorce, or just wage stagnation in the face of increasing inflation of food, fuel and almost everything else.

chucky

Graham_Devon wrote: »

Why would wages fall if house prices fell?

Lets say prices fall 30% in the next 2 years....what are the reasons for wages falling?

Less purchasing power after prices fall? First time I've seen that one mentioned.

we've been through this before with you quite a few times now and you don't seem to get it...

and if house prices drop 30% which banks are going to lend to people to buy property? let's have an on topic coherent answer please or at least try.

the more house prices drop the less people are able to buy property - it happens each and every time but you seem to think that "it's different this time".

dream on.

IveSeenTheLight

Home owners struggling with 1/2% intererst rates

Where can I get this 0.5% mortgage interest rate?
I'm currently paying 1.6% and feeling ripped of if I can pay less than a third of the interes

chucky

LydiaJ wrote: »

Nobody is suggesting that mortgagees are struggling because of 0.5% rates. What people are suggesting is that if households are struggling despite 0.5% rates, then things will get a lot worse when rates eventually go up. Other posters think that this will not be significant. Hence the debate.

The reasons why households are struggling will vary - redundancy, wage cuts, hours cut, illness, divorce, or just wage stagnation in the face of increasing inflation of food, fuel and almost everything else.

i think it has been claimed

macaque wrote: »

Home owners struggling with 1/2% intererst rates

Graham_Devon

IveSeenTheLight wrote: »

Quite simply through natural attrition, employers would feel less pressure to offer inrcreasing wages to support positions where the life costs were less.

I'm not saying they would be directly correlated, but it would filter through.

To try and explain a different way. If house prices were still as they were in the 70's, do you think wages would be as they are now?

P.S. My less purchasing power is relating to the amount of net income left after housing costs removed.
At the moment housing costs are circa 29% of income

29% of £1000 is £290, meaning that £710 is left for other purposes

29% of £500 is £170 meaning £330 left for other purposes.

Lower housing costs and lower wages, means less disposable income.
Everything else would need to reduce to make affordability the same

So you can't state how wages would fall.

All you can suggest is they may not got up so much.

I can't see anyone recieving a pay cut, with the reason being "well house prices are falling". Which is why I thought it was rather a bizzare suggestion.

Graham_Devon

chucky wrote: »

i think it has been claimed

Struggling with isn't struggling because.

With & Because are two words with different meanings.

chucky

Graham_Devon wrote: »

Struggling with isn't struggling because.

With & Because are two words with different meanings.

here we go, the graham devon show and cue 18 pages of the devon bloke going on a tangent because his argument is being questioned...

desperate much